Should Resort Towns Shut Out the Wealthy?

By Robert Frank

Summer is the time of year for beaches, ice cream, family…and complaining about the rich.

(Courtesy of Wikipedia)

Forte dei Marmi’s Fortino.

Whether it is the Hamptons in New York, or Aspen, Colo., or Cape Cod, Mass., or the Med, the song is the same: The rich are ruining the place, according to the oldtimers. The small cottages and local charms have given way to monstrous mansions and luxury chain stores and crowds of wealthy people jostling at 7 a.m. for the same $5 muffins.

And there isn’t much a town can do. Or is there?

The mayor of a seaside resort town in Italy became so fed up with the annual invasion of wealthy Russians that he has imposed draconian measures to keep them out. Mayor Umberto Buratti of Forte dei Marmi, the famed retreat of rich Italians, celebrities and artists, has imposed a 20-year ban on selling real estate to foreigners. He also has set aside land with sea views that will be sold only to locally born buyers or long-term residents.

“We want to safeguard the character of the town instead of seeing it turn into a place with no ties,” Mr. Buratti told the Guardian.

He says locals have been priced out by Russians willing to pay as much as to €100,000 ($126,400) to rent villas for the summer. A town councilor added: “You look at the designer shops round here and we could be in London.”

It all sounds noble. But Mr. Buratti may be overlooking two important considerations. First, lots of locals have gotten wealthy (or wealthier, anyway) from those “dreaded” Russians. Whether it is renting their villas for €100,000, or selling them calamari and Barolo at the local restaurants, the locals have probably weathered this recessionary summer better than most.

Second, the Russian super-rich can probably figure out ways around the rules anyway. Like getting a local to act as the front man in any purchase.

Mr. Buratti has got a point about great wealth bulldozing a town’s culture. But at a time when many communities around the world could use some excessive spending and the jobs that can create, his crusade may turn out to be more of a political statement that economic reality.

Comments (5 of 12)

With great wealth comes great expectation and a servant-culture to service that. In the US (where I'm not) it seems that overwhelming local culture is acceptable because someone is profiting therefrom. A community is an ecosystem with a variety of niches. Reduce that to a few dominant predators and a limited variety of support organisms and a small event can topple the whole thing. One need only look at collapsed company towns to see an analogue.

9:09 am July 14, 2010

Paul wrote :

@Huh, Seriously, you can shove your snark where the sun doesn't shine. If your only contribution is to point out a simple typo, don't bother contributing. You obviously have nothing of intelligence to add to the conversation. So, butt out.

3:43 am July 14, 2010

Jim from a beach resort community wrote :

Remember, for a wealthy person to buy a property in a resort community, there must be a willing seller. This assumes no strong arm tactics/threats or condemnation/resumption by local authorities (can you say Kelso v. New London)? If someone wants to buy and someone wants to sell, why should local government get in the way? Oh yeah, we're talking about Italy here, right? A model of open and non-corrupt government.... (we really do need a universally recognized sarcasm font).

6:11 pm July 13, 2010

greed rules wrote :

Positively YES!!!!!!

About The Wealth Report

The Wealth Report is a daily blog focused on the culture and economy of the wealthy. It is written by Robert Frank, a senior writer for the Wall Street Journal and author of the newly released book “THE HIGH-BETA RICH.”